Medical Devices

Indonesia population of more than 262 million (as of the beginning of 2018) has placed Indonesia at the top 4 spot as one of the highest population countries, among the 193 nations of the world.

According to World Bank, people aged 65 years and above in Indonesia have reached 14.4 million. There is a 40 per cent growth of elderly people by 2025, which will also place Indonesia under the spotlight, becoming a fast ageing country. This shocking rise of the ageing population will have an enormous impact on the economy level of many industries, especially the medical devices and healthcare sectors.

Highlights

The total value of imported medical devices is estimated to reach IDR 28.4 trillion (USD 2,030 million) in 2018.

For “Personal Care” segment in regards to the healthcare sector, the revenue amounts to IDR 6.3 trillion (USD 450 million), with an annual growth rate of 14.9 per cent (CAFT 2018-2022), resulting in a market volume of IDR 11 trillion (USD 785 million) in 2022.

The largest class of medical imports is medical consumable products.

Medical Device Markets in Indonesia

Due to the ageing population and prevalent elderly diseases in Indonesia, such as hypertension, diabetes, stroke, arthritis, cardiovascular issues, and other chronic diseases, there are immense demands from the medical device and healthcare markets.

This sector is estimated to exceed USD 1 billion or equivalent to IDR13.5 trillion. Among these figures, foreign products take over 95 per cent of the market, with only 5 per cent of local products.

However, since 2016, Indonesian firms also became the makers for complicated instruments, such as sphygmomanometer, stethoscopes, urine catheter, infant incubator, nebuliser, dental chair, EKG, blood-grouping reagents, and first-aid boxes, and kits.

Middle-Class Medical Devices

Besides, local medical equipment manufacturers in Indonesia have begun to engage in mid-range technology with more affordable pricing catering to middle-income groups, such as ultrasound devices and X-ray. As a result, more competitiveness has since been generated to strengthen the middle-class healthcare and medical devices, in terms of volume and value.

Local firms such as Indofarma and Kalbe Farma, have diversified their product portfolio and are no longer just pharmaceutical manufacturers, took the lead and developed their medical devices for sale in the country. Several other local firms and innovators also participated in the IndoHCF Award 2017, showcasing their medical device innovations in regards to heart and kidneys examination.

According to the Ministry of Health, it is expected that local manufacturers of medical devices can fully master the technology of middle-class medical and healthcare devices by 2035.

Medical Institutes and Hospitals in Indonesia

The registration of medical devices falls under the regulation No. 1477/C/SK/IV/91, supervised by the Indonesian Director General of Food and Drugs under the Ministry of Health. Indonesia’s Ministry of Health is responsible for bidding all public hospital procurement for disposable medical supplies and medical devices.

Many new private medical institutes and clinics have been opened in major cities, experiencing significant growth despite the economic slowdown. Most medical expenses are in the private health care system, accounting for 53.4 per cent of overall healthcare spending.

The island of Java offers a higher standard of medical care in Indonesia, especially in the capital – Jakarta. The need for high-quality medical services has led to the establishment of small and state-of-the-art private hospitals.

As of 2016, Indonesia has a total of 2,601 hospitals–988 privately owned and 1,613 managed by the public sector, according to the Ministry of Health in Indonesia.

Foreign Investments and On-Going Projects

In 2017, investments in the medical service industry of Indonesia spiked as much as seven-fold to IDR 4.7 trillion (USD 343 million) in 2017 compared to 2016. The soaring investments came from both new and existing local businesses, as well as international companies.

There were 27 new firms entering Indonesia’s medical device industry of Indonesia in the same year, raising the total number of firms in this industry to 242. These new companies produce a total of 294 different medical types of equipment and related products. The most recent investments in Indonesia’s medical device industry are an IDR 91.5 billion (USD 6.7 million) coronary stent manufacturing plant in Tangerang, Banten; and an IDR 16.8 billion (USD 1.2 million) surgical suture factory in Cikarang, West Java.

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Selected testimonials

As a new business in Indonesia, we started consulting with multiple law firms but quickly narrowed down to only Cekindo. Cekindo was recommended as one of the top firms by multiple sources in the business community. The staff at Cekindo was very responsive to our needs as a new business. The team provided consultancy and assisted our startup firm with initial business setup, licenses and permits, HR/recruitment and market research. One year since our establishment, we still consider Cekindo as our partner.

PT Ohmnia Tenaga Surya

When we intended to enter the Indonesian market back in 2013/14, Cekindo helped us to understand the possibilites and options for business presence in Indonesia through legal advice & also advisory on how to arrange for ownership. Furthermore, Cekindo also provides us with a range of fully professional and reliable accounting & tax services for our representative office in Indonesia. In the world of digital & virtual economy like today, it is an essential prerequisite to have the most reliable business partner like Cekindo.

Jan PilařHydropol

A huge gratitude to Cekindo, particularly its visa team, for handling our visa cases. During our visa applications, Cekindo was extremely helpful not only in facilitating all of our visa requirements but also in clarifying our queries/doubts. I would like to take this opportunity to acknowledge and appreciate the good work of Cekindo’s visa team.

Sagar DatarBristlecone

When I was looking for a reliable partner who could help with company registration, payroll, taxes and working permit in Indonesia, Cekindo’s domain knowledge and clear communication astonished. Firstly, we decided to pursue cooperation with Cekindo in terms of company registration, but they also assisted me in obtaining the necessary working permits and visas (KITAS), and we use their payroll and tax reporting services until now.

Matthias CoessensProduct Director at Empyrean Solutions Apac

Cekindo handled business visa for our new colleague promptly and made the start of our company in Vietnam easier and faster. I particularly enjoyed communication with the consultant, who advised the best solution for us and was all the time available to answer any questions. She made sure that all the documents were collected and prepared on time and we got great support during the whole process. Thank you Cekindo and I hope to cooperate again in the near future!

Ivana BartonkovaMarketing and HR director of Port Cities Vietnam

Cekindo assisted us with a selection of our local distributor in Indonesia and organised several meeting in Jakarta. Their assistance enabled us to meet our potential local partners and choose the best distributor conveniently. The decision to cooperate with Cekindo was based on a recommendation from our prominent partner in Bali and we cannot be more grateful. Cekindo’s systematic work, active communication, thoroughness and professionalism was exceptional.

Ing. Václav TomekPhyto CZ Sro

Cekindo initially helped us with setting up our business structure in Indonesia and getting us all due licenses and approvals. Currently, Cekindo is associated with us as our business partner in Indonesia by providing a face to our name and handling various business activities on our behalf. Without their help, we would be lost in keeping up with regulatory requirements and being a compliant company in Indonesia.

Vivek S.RathaurVega Industries

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